IBM intervenes in Amazon cloud case

By Frank Konkel

Aug 06, 2013

The battle between tech titans IBM and Amazon Web Services to win a cloud computing contract with the CIA worth up to $600 million now resembles a chess match, with each side answering the other's moves with legal filings and carefully crafted public statements.

AWS won the contract to build a massive private cloud infrastructure for the intelligence community in January. IBM then filed a bid protest in February that the Government Accountability Office upheld in June, directing the CIA to comply with recommendations it made.

Then on July 24, AWS challenged the necessity and scope of corrective actions the CIA took in response to recommendations from the GAO, filing a complaint against the federal government in the U.S. Court of Federal Claims in hopes of expediting a resolution. AWS seeks a formal response from the court by Sept. 23.

But Big Blue didn't sit idly by.

Its legal team moved to intervene immediately, and its formal request was granted by Judge Thomas C. Wheeler on July 25 – neither AWS nor the federal government objected. In legalese, an intervener is a nonparty that joins ongoing litigation because the judgment affects the rights of the nonparty. As an intervener, IBM is also afforded the right to answer any claims made by AWS.

That IBM filed as an intervener is no surprise – AWS was an intervener in IBM's bid protest to the Government Accountability Office – but it highlights the importance of this cloud deal. It also suggests IBM will continue to be aggressive in pursuing a resolution. In its motion to intervene, IBM states it has a "substantial chance of receiving" the contract award and claims it and AWS have solicited or will solicit new proposals.

"Following GAO's decision, the [CIA] determined it was appropriate to revise the request for proposal, solicit new proposals from IBM and AWS, and make a new award decision," the motion states. "As a result, IBM has a substantial chance of receiving award of the (cloud) contract."

The CIA declined to comment on the specifics of how it carries out GAO's recommendations. AWS also declined to comment when contacted by FCW for this story, but maintained following its court filing that "the CIA got it right the first time" and touted its "technically superior, best value solution."

IBM, meanwhile, stressed to FCW the advantages it feels it has in security and reliability.

"IBM has been delivering trusted and secure cloud services to business and government clients for many years, and working with virtualization technologies for more than 40 years," the company told FCW in a statement. "IBM is committed to continuously infusing new capabilities, proven security and reliability, and leading edge technology for its enterprise cloud clients in the public and private sector. Now more than ever, the United States government needs the safety and security of IBM's decades of experience in managing sensitive data."

Securing the CIA as a customer would be a major coup for Amazon, already the largest public cloud infrastructure provider in the world.

For IBM, a long-time federal contractor that bought the world's largest privately held cloud computing infrastructure in SoftLayer Technologies in June, building a first-of-its-kind cloud for the CIA using its new capabilities would help solidify it as one of the major players in the federal space.

Who makes the next move? Stay tuned – in terms of federal IT, this battle is must-see TV.